CUC faces more damage

| 07/02/2011

(CNS): In the wake of the explosion at CUC last month the local power firm has suffered another major mechanical failure this weekend. The firm said no one was injured on Saturday, 5 February, when a Mirrlees 7.59 generator, installed in 1991 and due for retirement next year, failed. The damage was contained to the aging unit but the combination of the two incidences is likely to be of significant financial impact, the firm revealed on Monday. As the company battles with a number of generating problems, CUC officials have warned of further unplanned maintenance, which is likely to lead to rotating customer outages of up to an hour each in duration as a result of the firm’s short term capacity problems.

Saturday’s failure comes just over one week after the explosion during a start process at the plant site on Friday, 28 January, when equipment associated with an MAK 9 MW generator was damaged and two employees were injured, one of whom remains in critical condition in hospital.

CUC said damage to that unit was contained to peripheral equipment and the investigation into how the explosion, which is believed to be the first of its kind in the Cayman Islands, occurred.

Although the firm said it is pursuing insurance claims with regards to the loss of these two generators, the company is already waiting for payment from insurers regarding the failure of a 16 MW generation unit that was damaged in September of 2010, which the firm says is expected to be out of service until April 2011 because of the extensive scope of the repairs required.

“While the company believes that losses excluding deductibles from both incidents, including the cost of temporary generation and business interruption are covered by the company’s comprehensive insurance policies, delays in realizing insurance payouts could result in significant receivables to the company,” the firm stated on Monday. “The company also continues to pursue an insurance claim in respect of the failure of a 16 MW generation unit in September of 2010 … The generation units in question had all been serviced within established maintenance intervals. Investigations are ongoing and involve manufacturers’ representatives and independent investigators appointed by the insurers.”

In addition, to the problems with these three generators the firm also said another 14 MW of generator is also down due to routine service work that the company is now trying to complete as quickly as possible. CUC said it was also in the process of securing temporary generation to be brought on island to restore the required generating capacity reserves.

In the meantime, until the out-of-service capacity is restored maintenance issues may lead to further disruptions to the local power supply with customer outages of up to an hour each because of the shortfall in generating capacity.

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  1. Anonymous says:

    whats the point????…we live in a place where gov resists even the smallest environmental change like the ability to bring in elec cars….zzzzz

    keep burning diesel cayman…burn baby burn!

  2. Anonymous says:

    Well, CUC is in trouble and people are already carping about high profits and no service, high prices and no competition, no dividends, brown outs, and the need for government seizure.

    Has anyone bothered to look at CUC’s annual reports, published every year, and available for free on the Internet, and which state the results of its operations? If not, then I ask, why not?

    It was not long ago when Cayman enjoyed the most reliable, competitive, and best electrical utility in the Caribbean.

    So what has happened?

    What happened is what typically happens. Most people do not know when they have a good thing. In their minds,
    encouraged by ignorant politicians, there always exists a free lunch somewhere.

    And by God, they want it.

    So the politicians set up an ERA( our Energy Regulatory Authority) to find that free lunch, and give it to those hungry people.

    What does the ERA actually do? They sit around, sucking up funds from the government (us), while they try to second guess the management of CUC. Who pays for this? Who else but us. We pay the ERA directly, and the CUC side through our electricity costs.

    Who the loser is in this game is simple to answer,it’s us.

    Being bureaucrats, the ERA naturally writes regulations. For example, how much CUC can charge, how they can contract for services, and anything they can think of that may extract a pound of flesh from CUC. What do these regulations achieve? . Certainly they achievean enormous amount of fresh red tape, while driving up costs(which we pay) to administer that same red tape. Who is the loser here?
    Once again, it’s us

    Not seeing this, or being too stupid to understand it, these same consumers want the government to intervene and dictate how CUC runs its business. Everyone should know by now, that governments cannot run anything. This has been proven time and again throughout history. Whatever the business is, governments end up destroying it.

    There is nothing unique about CUC. The US is full of utilities which have been run into the ground by Public Utilities Commissions.(read ERA)

    Powered by people looking for a free lunch. First, the utilities cut back on customer service. Then when that is not enough, they cut back on maintenance(in other words, they try to live off of prior investments).

    That, my friends, is where CUC is right now. Cutting back on maintenance and trying to live off its prior investments. Everyone should be able to see that this cannot work, and unless corrected we can expect deteriorating service in the future.

    So it is up to us to convince our politicians that they are on theroad to ruin, taking us with them, and to reverse course immediately.

    There exists the right price for everything, and no amount of bureaucrats or politicians can change that fact. Free lunches are always an attempt to live off of previous capital investments. Free lunches can never work because they
    destroy capital, and therefore eventually ruin whatever they are applied to. If you want another example, think of rent controls, or price controls.

    From reading this, you may conclude that I have a special interest or arrangement with CUC. Let me state that nothing could be further from the truth. I am merely a consumer like you. However, I am an informed consumer, and that may be the only difference.

    My only concern is reliable electricity, and for one, at least, I want to pay for it.

    • anonymous says:

      ha!… so the blame now is government and not CUC for the high cost? You must be a brainwashed consumer!

  3. Anonymous says:

    Duty is already exempt on Solar systems!

  4. Anonymous says:

    What worries me is that these problems are happening in the cooler time of the year.  What can we expect during the extremely hot summer months?

    Insurance or no- it’s time to fix this service that I’m paying through the nose for.

    • Anonymous says:

      I keep wondering why people who write on blogs think it is OK to just write without facts. I beleive if one is going to make a comment, the least one can do is to be decent enough to state facts. I have been reading some of these comments and my initial reaction is one of alarm! I don’t know a thing about CUC apart from the fact that it provides a very reliable electricty service. One only has to travel to some of the islands in the region and you will understand. Live in say Antigua and you will know there is no comparision, brown outs are the norm. If you don’t have a generator outside your house, you are in trouble. If the company is having some challenges right now, be understanding. Why do we have to be so negative and badminded? I keep saying to my Caymanian friends, you all are too spoilt. Give up the a/c for a few hours a day and help out the situation, not only will the company benefit right now, but you will too as your bill will be lower.

  5. SMB says:

    Rolling blackouts because a lack of generating capacity…Not good. Cayman is too grown up for regular power outages.
    CUC’s reputation for dependability is on the line here.

    How soon will they secure and get the temporary generator on line so they can adequately meet demand?

    • Recently Enlightened says:

      “Cayman is too grown up for regular power outages.”

      California experienced rolling blackouts back in 2000/2001. Do you think that Cayman right now is more “grown up” than one of the largest states in the U.S. was 10 years ago?

  6. Anonymous says:

    I bet they’ll still charge the same amount even if you are without power.

    • Anonymous says:

      I believe that we all get charged for the amount we use! A power outage would naturally mean your usage would drop but probably not by very much. 

  7. Subway Cookie says:

    Sounds like CUC is saying they are not getting anywhere with their insurers so…..

    I did not make the statement when the last explosion occurred because it was insensitive to the two men who were injured. But, I will say it now. CUC is already whining about insurance so consider this a warning so we are not surprised when rates go up.

    Medical insurers have a legal obligation to pay claims within a specific time period, is there not any similar provision for this type of situation? CUC makes all the profit, there is no competition so I really dont want to hear about financial woes. It would not be in CUCs interests to expect the customer to pay for this. Just because the generator was required to expire next year does not mean they HAD to run it to its last breath! People are all feeling the pinch and no-one is going to sit quietly and let CUC charge us for their problems.

    Anyone have any links to the solar/wind stuff I am very interested!

  8. noname says:

    Wait for it…..wait for it….CaChing!

  9. Anonymous says:

    My heart goes out to CUC, it is really so so sad they wont be able to make the ridiculously high profits from monopolising power supply from a captive audience.  I am sorry if there is just a hint of sarcasm there.

  10. Anonymous says:

    I think strata rules need to be more open to solar panels.  We would love to install solar to at least offset the cost of the CUC bill but our strata committee will not even consider it.

    It’s really not acceptable to say that people will be without power on a rotation basis.  How can businesses function without power.  Even an hour of lost business can be very detrimental to a business.

     

     

     

  11. A Positive Caymanian says:

    The government should seize this opportunity to implement a sustainable power grid. My home is a combo of CUC, wind and solar – my CUC bill last month was $63. Cut duties on solar panels and wind turbines and lets cut our dependence on CUC and the dirty and dangerous power they generate.

    • Anonymous says:

      I have solar and wind as well saw almost 200 hundred dollars cut off my bill, if one thing in cayman we are not short on is sun, make the investment now when you can still afford electricity because its gonna only go up crude oil is not around forever.

    • Recently Enlightened says:

      I agree with you that renewable engery is the way to go. But do you think that the cost of implementing such a system is really in reach of the average homeowner? Cutting duties would be a start, but what keeps the businesses from raping the consumers regardless?

      • A Positive Caymanian says:

        No, I do not believe it is in most peoples financial grasp. And I’m sure Mac and CUC will do everything in their power to keep it that way.

    • Anonymous says:

      Hats off to you for being able to do that. I checked the possibility of solar panels for my house (around 2500 sq ft) and was quoted approximately CI$ 125,000.00 to do so. No mistake CI$125,000.00. Where would the average person come up with that kind of money for solar? Going Green is a wonderful idea for our planet it just is not feasible. After doing the math and it would take 16.2 years to recover the costs.

      • A Positive Caymanian says:

        Never once did I say it would be possible to do for the average household. The goverment should make consessions to home owners wanting to go towards a more green route to power their home. Going green is very feasible, its the sheep like yourself that have been led to believe that it is not.

    • average broke Caymanian says:

      You speak flowery words, but HOW?

  12. Anonymous says:

    With all the million$$$ they collect a month they can do better with quality control and the safety of workers !!

  13. Anonymous says:

    The only question left to be answered is, when do we (the customers) start paying for it?

  14. Anonymous says:

    Hmmmm well guys expect a raise in your utility bills in the next few months 🙁

  15. Anonymous says:

    Will there be no dividends this year or will they jack up the prices, leaving some or most to the fate of candles?